As a Netflix customer, I think it is great the company is licensing more digital content. But the deal they announced this morning with EPIX will only give Netflix access to less than 300 movies to add to their inventory. And while EPIX already streams a lot of their movies in HD via the EPIXHD.com website, (Hands-On Review With EPIX's Movie Streaming Service) Netflix will only be getting access to EPIX's movie inventory in standard definition and not in HD.

Neither company is giving out any details on when the content will be available on Netflix but you can take a look at the current list of 306 movies that EPIX has available by going to www.epixhd.com/all-movies. While rumors of the licensing deal are saying that Netflix will pay EPIX $1B over five years, I find that number hard to believe. Even if Netflix got access to all of EPIX's current inventory, they would be paying an average of $200M a year for less than 300 movies. That's an average of $650,000 per movie. That can't be right.

While one could very well argue that there are already too many content delivery vendors in the market, that doesn’t seem to be stopping more companies from entering the space. The latest, Prime Networks, was founded in 2008 and last year, got an undisclosed amount of funding from Andreessen Horowitz, the venture capital firm named after co-partner Marc Andreessen, the co-founder of Netscape.

Normally, I’d say that Prime Networks has no shot at making it in an already crowded CDN market, but the one thing they have going for them is that their area of focus is outside North America. Of course, they aren’t the only CDN vendor that’s focusing on a specific region in Asia, but with over 400M internet users in China alone, the market for content delivery services in Asia is expected to see some serious growth. The growth in the region won’t guarantee that Prime Networks will be successful, but at least their odds are a little bit better than if they were launching in the U.S.

Prime Networks currently has 100Gbps of network capacity and has 40 customers to date, including MSN China. The company is still defining their North American based strategy and chances are, will enter up partnering with a U.S. based company rather than build out their own network in the U.S.

While the company has been pretty quiet to date and hasn’t done much in the way of marketing, one hopes that when they are ready, that they learn from the past mistakes other CDNs have made in entering the market. The company is going to need to communicate to customers a real message of who they are and what they do and not simply use a bunch of marketing terms. Right now, Prime’s website talks about how they are a “next generation content delivery network” and that their advantage is that they differentiate with their “reliability, performance, and customer service.” Basically the exact same things all the other CDNs say.

Prime Networks also says that their “content delivery solutions consistently outperform other current CDNs in terms of both speed and availability, as measured by third party testing services“, yet they provide no details of on the results or the testing. They say to contact them for results of the third party tests, yet I’ve sent in three emails and received no response. Their website also says that the company was founded “by a team dedicated to building leading technologies to provide world
class solutions to the most challenging and dynamic CDN markets in the
world,” yet they don’t list any executives or even a CEO by name which is a little strange.

It’s possible the company just wants to stay under the radar for now and not provide a lot of details on what they are up to, but it would then be best for them not to make such bold claims about their service on their website.

We're excited to announce that Rishi Chandra, Product Lead for Google TV will be the keynote speaker on the first day of the Streaming Media West show, taking place November 2-3 in LA. With Google TV expected to launch sometime this fall, the timing for the keynote could not be any better. While I don't have any details to share as of yet regarding what Google plans to show, I expect that come November, attendees will be able to get hands on with Google TV via certain devices. Some of Google's partners like Logitech are expected to announce the availability of their Google TV companion box, named Revue, sometime in Q4 and I'm working on trying to get a few Revue boxes to give away after Rishi's keynote.

Keynotes at the Streaming Media West show are always free to attend and online registration is now open. Simply register for a free exhibit pass and you're in!

Chalk up another telco win for EdgeCast. This morning, the company announced that Canadian telco provider Telus would being reselling all of EdgeCast's content delivery services. Like many of the other carriers that work with EdgeCast, Telus will use EdgeCast's platform to provision and support their own customers across the EdgeCast network. Telus has spent the last few months training roughly 400 account managers responsible for selling into medium and large size enterprise and government accounts and are developing an overlay network of CDN specialists.

It's interesting to note that Telus mentioned that they "had a buy and a sell relationship with Akamai for years which was useful on some very specific opportunities", but that they "couldn't move it to the next level." Their deal with EdgeCast will eventually end up being an exclusive reseller agreement and Telus said the primary reason they picked EdgeCast was because they "understood carriers needs" and that EdgeCast "was designed to work in a carrier environment".

While many people have been speculating for the past two years that telcos and carriers would dominate the CDN space and put the pure-play CDNs out of business, that could not be further from the truth. Telus is another of nearly a dozen examples of carriers getting into the CDN space by partnering with pure-play CDNs as opposed to spending a lot of CAPEX to build out their own CDN capabilities. Telus mentioned to me that their capital spend and operational focus right now is all about national wireless network upgrades as well as backbone upgrades and spending money to build out their own CDN is not crucial to their success of their business. Like most carriers, they simply can't justify the CAPEX to build or buy their own CDN.

While the market for CDN services in Canada is still small when compared
to the U.S., projections, data from Cisco says the total CDN market in
Canada, for video and non-video content, was $106M last year, growing to
$174M by the end of 2010. When asked to comment on those numbers Telus
said they seemed a bit "high" and felt the size of the market in Canada
for CDN services was more along the lines of "about $90-$110M this year".

For EdgeCast, they are doing a nice little business dealing directly with the carriers and now have contracts with Deutsche Telekom, Global Crossing, Telus, AAPT in Australia, Dogan Telecom in Turkey and I hear more deals are on the way. Based on the deal sizes I have seen and the number of customers EdgeCast has, I estimate they are on a run rate of over $20M in revenue for 2010.

It’s been awhile since I did a round-up of all the jobs available in the industry and taking a look at vendor’s websites and Monster.com, I see more than 300 open positions for sales, technical, marketing and product roles – and not just at vendor companies. Below is a run down of the ones I have seen so far and you can send me an email if you would like me to add your company to the list:

• Adobe: has at least 12 open jobs pertaining to online video including a TV Everywhere Support Engineer, Sr. Computer Scientist for the Flash Media Server position and whole host of others.

• Amazon: has a bunch of open positions with their CloudFront product group.

• Akamai: has at least two dozen open positions
  having to do with video including a Director of HD Strategy, Product
  Line Director of video delivery, Senior Product Manager for streaming,
  Quality Assurance Engineer for Streaming SQA and a lot of interactive,
  marketing, product and engineering positions.

This morning, Limelight Networks announced they have acquired privately held Delve Networks, a SaaS based online video platform (OVP) provider, in a mostly cash and small equity transaction. Terms of the deal were not disclosed but I have learned that Limelight valued Delve at about $10M. While the acquisition won’t add much in the way of top-line revenue to Limelight, it does give the company a crucial piece of software to help enterprise customers manage their video assets and also gives Limelight a video analytics component.

Delve Networks was founded in 2006 and since that time, had raised just under $10M in venture capital. The Limelight deal includes an earn out component for Delve based on meeting certain revenue targets so there is a chance that Delve’s investors may break even on the deal. With so many online video platforms (OVPs) in the space and the market not being large enough to support them all, more deals like this are inevitable. While OVPs play a crucial role in the market, there simply isn’t enough business to support the dozens of vendors all trying to help companies solve the problem of video ingestion, transcoding, management, monetization and tracking.

Delve’s CEO & Co-founder Alex Castro will stay on with Limelight as VP and GM of video platform solutions and Delve’s 22 employees will stay in Seattle and now become Limelight’s official office in that region. In addition to the technology, Limelight also now controls some unique patents granted to Delve pertaining to video search and speech recognition and Limelight greatly expands their engineering team since most of Delve’s 22 employees were on the engineering side.

For Limelight, this is a smart deal and one that I expect we’ll see them do more of. They have made two acquisitions in the past eight months and I expect
we’ll see one or two more deals of this size, probably having to do with site acceleration and analytics, before the year is up. While Delve was not doing a lot of revenue, they did have 100 120 customers and once they get integrated into Limelight’s infrastructure, Delve’s largest CAPEX cost gets reduce and their margins soar. Similar to Limelight’s recent purchase of EyeWonder, Limelight should be able to see Delve’s offerings have margins of more than 70%.

This is a really crucial time in the market for Limelight Networks and I consider 2010 to be a make or break year for the company. If they can continue to sell more value add services with higher margins and penetrate the enterprise vertical with more wins, the company has a chance at being profitable by the end of the year, thanks in large part to EyeWonder’s high-margin revenue. The company has not been able to show a lot in the way of revenue growth over the past 5-6 quarters, so deals like this make be just what the company needs to get their business going again.

As a result of Limelight focusing on more non-CDN services, it’s also interesting to note that I am hearing about companies who would not have though about potentially acquiring Limelight a year ago now keeping a closer eye on the company. While it has always been speculated that Limelight would some day be acquired by a telco, if they continue to move to being more of a SaaS provider, it probably wouldn’t be a telco that ends up taking them out of the market. (I’ll give out more details on this shortly and name some of the companies I think may be a fit in a longer post I am working on about Limelight’s business.)

Today at 2pm ET I'll be moderating another StreamingMedia.com round table webinar entitled "Making Sense of The HTML5 Buzz". We've been hearing a lot of noise on HTML5, and it's certainly been getting a front row seat by the press, but what exactly does it mean to online video?

Join our panel of presenters from Adobe, Kaltura, Limelight Networks and Tremor Media as we explore the topic, and provide an open Q&A forum to answer your specific questions relating to HTML5 and web video.

You can still register and attend for free at this link.